The Internet of Things

Where Does Value Live in a Connected World?

Ubiquitous connectivity and control which constitute the most comprehensible and perhaps the most hyped promises of Internet of Things (IoT), fundamentally exist to support an overarching value-realization vision.

In order to better understand the vision of value realization, and to be able to take concrete action to realize value, it is useful to separate value realization into three different components:

1. Value Creation
2. Value Harvesting
3. Value Migration

Value creation refers to the capturing of new value by connecting what is, today, unconnected. This concept is fairly intuitive to grasp.

Value harvesting refers to the process of unlocking value that is locked up in connected processes, people, data and things by enabling autonomous operation of the connected or networked elements in order to provide a seamless holistic functionality that can contribute to lowering cost and/or improving quality of products and decision making. This provides the means to raise service-levels by doing all of the above at speeds not possible in an unconnected world.

Value migration refers to the competitive advantage that organizations can gain over competition that may be slow to act upon IoT initiatives, thereby causing a migration of market share from the less connected to the more connected companies. This is self-evident, or axiomatic.

Autonomous Operation - A Basis for Definition

While it is clear to see that value migration is axiomatic and value creation intuitive, the compartmentalization above serves to focus on the most important aspect of value realization: value harvesting.

It is a fair argument that no amount of connectivity infrastructure can unlock value in connected elements, nor an IoT network provide value greater than the sum of its parts unless there exist actionable mechanisms to orchestrate the connected actuators to act upon data generated by thousands - even millions - of individual sensor to produce actions that contribute to furthering a collection of operational objectives.

Objectives that contribute to improvements in cost, quality, service and speed. The comparison is not unlike that of a swarm of distributed agents which, based upon static or learning algorithms, work in concert, in real-time, to further the objectives of the swarm. In short: autonomous operation, with big data and fast data.

IoT, therefore, may be defined, in business terms, as the real-time seamless autonomous interaction, via multi-topology networks, of collections of networked elements which may be people, processes, data or things, in accordance with domain-specific, user-defined sets of rules and decision matrices to intelligently achieve operational efficiencies with regard to cost, quality, service and speed.

See Part 2: Enabling IoT: Infrastructure and Functional Autonomy